It is very hard to find stores carrying a wide selection of games any more. This creates a wonderful opportunity for a store brand itself as a game focused operation and encourage people who want games to come in and buy them. As a simple guy I still believe GameStop is such a place. Unfortunately, every time I test the hypothesis it is proven false.
I first encountered the problem when I tried to purchase The Beatles Rock Band. The title was one of the most heavily promoted in the history of games. There was even a New York Times Sunday Magazine feature about the release. Having never run a great big retail chain selling games, my simple mind thinks this is a great opportunity to take advantage of the public coming into the store for the first time to buy a game. The mainstream press is featuring a known brand and for the first time, we will have it. Once these customers who are otherwise very expensive to reach are in the store, we can get them into powerup, upsell and otherwise connect in ways we never connected before. Instead, the Comic Book Guy who was standing in front of a pile of the fresh and sparkly new copies of the game told me they were sold out. They were only fulfilling pre orders.
I sometimes still stop at GameStop because it is on the way to Best Buy and I have about a 50/50 chance of being able to pick up a game within the first week of release - I never have a problem at Best Buy. You may ask why I continue to go to GameStop. I promise you it is not for the aggravation, I genuinely want to support the store. What is good for GameStop is good for the industry. I know I rant about used games to anyone who will listen and most people who would rather not, but the company is not only a bell weather, but a critical pipeline for retail sales. Please GameStop, help me to help you.
Today I went into buy Splinter Cell. Standing in front of a dozen copies of the game, the junior Comic Book Guy told me it was sold out.
"But there are a dozen copies right there on the shelf." I said naively.
"Those are all reserved for pre orders." he replied not looking up from the important thing he was doing on the store computer.
"But they are all right there on display and have not been picked up."Comic Book Gal, Lanara the store manager stepped in to explain "We called all of the customers and they told us they are going to pick them up."
"But we are outside the 48 hour window and the policy is to release the pre orders after that time."
"Not mine. As a service to my customer I hold the game for them if they say they will pick it up."
"But if you sell the game to me, you will do two turns from the same facing. I will buy the game and they will buy it when it comes in. You say customer service, but you are providing an accommodation to someone who chose not to comply with their end of the pre order commitment, over a new customer who will otherwise be turned away." Yes this is way to much time spent in the store. I need a hobby.
"I choose customer service over revenue and I am sure everyone in corporate would agree."
Somehow I do not think so. If I pre ordered a game, did not pick it up, and was pointed to this policy:
Product PickupI would probably rethink my behavior and I chose to pre order again, I would pick it up on time. As a new customer if I walk in and I am treated like someone who is not a member of the club just because I went in to purchase a very heavily promoted game, I would take my business to Best Buy.
As release dates change frequently, we cannot guarantee arrival dates. You will be contacted by the store, at the phone number you provide, when the product arrives and is available for pickup. Items not picked up within 48 hours may not be available due to the high demand for new releases. Your name will be placed on a waiting list at your request, and we will contact you when we receive more. If the product is not picked up within 48 hours, you authorize us to charge you a $5.00 fee to cover the cost of shipping and handling to the store.
Lanara's behavior hurts the store on a number of levels. It may sound obvious, but GameStop is in the business of moving units. I would completely agree with her Nordstrom's like level of customer service - if there was no stated pre order pick up policy. The policy is in place because GameStop is in the business of moving units. They must move units to generate revenue and cover the outlay for the initial shipment of the product, but equally important, the sooner the unit leaves the shelf the sooner it comes back to be resold as used. We are not talking about single unit because someone ran into car trouble or could not make it over. It is over a dozen. This indicates a pattern of behavior on both sides of the table which must be larger than a single game. Her "customer service" led to a malaise about the pick up window, leading at least a dozen customers to feel they can come in whenever they want. If we look at the aggregate number of games moving through the store and add up the aggregate number of days they remain on the shelf despite willing purchasers and knowing the pre order customer would likely buy another copy from the next order, we are talking about a substantial revenue hit and carrying cost of the games before high margin resale. Worst of all, it is simply not customer service.
When she called it "her" store and told me she could operate it as she pleased and chose customer service over revenue, I had to wonder where the customer service was happening. I am not talking about her not playing "the customer is always right" - although I was - it is the state of the store. Call me old fashioned, but customer service would
I am not talking about what they said, or even they way they said it. It was they did not say. Instead of "the game is sold out" and ending the conversation to return to the urgent computer matter in the store which was devoid of all other customers, how about "the game is sold out but we will have more in stock next Tuesday. I would be happy to take your pre order and hold one for you to make sure you get it." Or, "the game is sold out but I can see on line that it is available at this other location 2 miles away." This is neither the first time this happened, or the execution of cold fusion. This is a situation they encountered before and can be pretty confident they will encounter again. Does the guy not know when he will get a new shipment? You may ask why I do not just pre order. It is probably a character flaw or premature toilet training, but I just cannot make the commitment. Not commitments in general, I have been married 23 years, just that one.
GameStop grew, thrived and now survives on the core gamer. This is no longer enough. The people who work in the store are cultivated and allowed to act, talk and maintain the store reflective of that customer base. Unfortunately doing so alienates the other 80 percent of the public who would like to purchase a game. Catering to the core gamer who chooses to pre order is an increasingly dangerous business at a time when game purchasers migrate to digital download. The focus has to be on the broad audience of walk ins who did not anticipate the release 3 months ago.
In his 1996 book, Being Digital, Nicholas Negroponte wrote that everything happening over wires would move to the air and everything in the air would move to wires. He was talking about satellites and cable lines, but change "cloud" for "air" and "store" for "wire" and the thought is painfully applicable to the game business and GameStop's opportunity. GameStop's core consumer, the one who pre orders and turns in and buys used games, will shortly be moving to the cloud. The company believes this console launch will be the biggest in history, yet it is still catering to those customers through physical disks. GameStop will have a great quarter, but it is like gas stations selling Teslas. Every purchaser of a next generation console is getting a free ticket out of GameStop. If they care enough to buy a new console at launch, they are savvy enough to download their games in the future. The core consumer is moving to the cloud, but this is not the end of GameStop. There is still a role for the company with a mailing list of 18 million and 80% of the purchasers of games walking through their store every month. But they have to grab the opportunity before the second number goes away.
Customer acquisition is the lifeblood of the game business and the cost is increasing exponentially with the growth of competition and the silence of digital distribution to the physical world. GameStop is sitting on a tank full of whales in a world while everyone else trying to harpoon them in the open ocean. Every person on the mailing list paid to purchase a game. Every person opted in to receive game information. They just do not get it. If GameStop can unify the on line distribution systems as fan.tv did for video and create the horizontal connections within their community to allow for recommendations and trusted referrals, it can be the one site to rule them all. They will still be in the business of selling games, but they get rid of that pesky inventory thing and collect only high margin affiliate fees. If they want to see how this works, take a look at greenmangaming.com, it is a startup that is eating GameStop's lunch.
You may think this is all very nice, but what about the stores. Well, that is the other half of the Negroponte parallel. Right now hardcore goes to the store and the mainstream orders through iTunes. in the very near future, the casual and midcore will still be using 360s and PS3s and will still be buying disks. They will also be more likely to walk into a mall based game store to understand what this game thing is all about. Lanara was right. Customer service is key, they just do not have any. Just as Apple used impeccable customer service to bring technology to the mainstream and rise like a phoenix from the ashes of brick and mortar, GameStop can lead the market for games. More people are playing games than ever before and none of them know which game to buy next. GameStop should be there to provide the best, curated experience. There is no good reason for customers to go to an Apple Store over than purchasing on line or at Best Buy, but they do because they are made to feel welcome and knowledgeable people talk with them. If people feel welcome to walk into the store, they will and they will be on ramped into the GameStop community.
People seem to like lists, so here are some suggestions in list form:
1) Clean the stores.
It will be expensive, but you cannot afford to not do it.
2) Curate the experience.
First there has to be an experience to curate. Richard Branson revolutionized record retail by making customers feel welcome to stay. He put sofas in his stores and encouraged them to listen to music. People who listened purchase more. A game in a box is no fun. A game running in the store is fun. That is what games do. Encourage the consumers to stay and hand mom and iPad - they type you are selling now - to show she can have fun playing games too.
3) Welcome new customers.
Train employees to engage customers to determine tastes and goals. One major retailer operates an internal competition based on employee's product knowledge gained before work, relevant questions asked of customers and follow up. The store can engender loyalty by educating the customer about hardware and software purchases. The staff can become the game geniuses.
4) Connect the community to each other.
While the world is going digital, GameStop is not. Many sales functions moved on line, but there is no community support. The company continues to broadcasting radio show performances over television. Digital does not mean catalogue, it is bidirectional and horizontal. Let the consumer communicate with the store and each other. Not just forums, but value. Why is Gameinformer.com separate from GameStop.com and why do the forums look and sound like they are stuck in 1999? How did Twitch.tv happen without them looking? Tens of emails go out every week to loyal customers why don't you introduce them to each other. Facebook, Google, Amazon and every other modern company is valued on access to a customer base, why do you let them walk out the door and not talk with them?
5) Start a continuity program.
In the old days we had Columbia House who sold us 12 records for a penny so long as we promised to purchase an equal number at full price over the course of the next two years. Guthy Renker and Beachbody Fitness make hundreds of millions by getting customers to make long term commitments to content they do not even use. The closest thing GameStop gets to this kind of program is a used game bundling program but this targets the wrong audience and does not create recurring revenue. This holiday season every mom should see an opportunity to buy a dozen games for USD 10 and make a commitment to buy four full priced games next year. Instant liquidation of back catalogue used games and creation of predictable revenue. Isn't this better than trying to move used games to people who are interested but cannot find the game in the limited stock of back catalogue spread amongst all of the stores and get commitments for multiple titles rather than a one offs.
6) Stock games.
We understand your the sale of new games is merely a financing tool for building a stock of high margin used games, but right now you are playing it just a bit too cute. According to Lanara the manager, pre orders are used to determine the number of games to stock. She said the company stocks to pre order. This is perfect for a distribution warehouse, but kind of silly for a public facing retail operation. Please go back to the old days. Extrapolate the size of the inventory from the pre orders. You know very well how many units will sell beyond the pre orders, so just stock a few more.
This is the part where I am supposed to tie it all together with a pithy comment and thoughtful outro. Sorry, I got nothing.